ECON 135, Money and Banking, Spring 2009

Instructor: Warren C. Gibson, Ph.D., P.E.

• email: warren(at)gibson2.com.
• phone: none
• Office hours: Wed. 3-4:30 PM, not in my office but at Cafe Pomegranate, San Fernando between 5th and 6th, across from SJSU.

Syllabus

Available here.

Course texts:

• Murray N. Rothbard, "What Has Government Done to our Money," available at the SJSU bookstore (cheap) or as a free pdf here.
• Hummel and Gibson, "Money, Banking and Finance," is available as a free download, consisting of a cover page and a 300 page text. I recommend download only if you have a fast duplex printer. I strongly recommend that you consider a hard copy instead, available for $17.50 from Maple Press, located at 481 E. San Carlos between 10th and 11th. I will announce when they will be ready on Wed. Jan 28.

Miscellaneous readings

This are optional readings and will not be covered in exams unless I explicitly say so.

• Interview with George Selgin on free banking. I might have included it in the course if it had come along in time. Consider it recommended optional reading.
• Friedrich Hayek, A free-market monetary system, talk given Nov. 10, 1977
• John Taylor, How Government Created the Financial Crisis, Wall St. Journal, Feb. 9, 2009.
• Interview with Robert Albertson on the credit-loss cycle
• Information on I-bonds and TIPS (inflation-adjusted Treasury securities) here.
• Article about inflation-adjusted savings bonds.
• Excel spreadsheet with exercises involving a simple bank balance sheet.
• Prof. Hummel's powerpoint slides from Apr 1. (6.5 Mb file)
• Selected yields and Fed data from a recent issue of Value Line.

Corrections and additions to text

• Powerpoint slides on foreign exchange.
• Powerpoint slides on the balance of payments issue. Shown in class May 6.
• Powerpoint slides on bank regulation and the S&L crisis shown in class May 4.
• Powerpoint slides on the Great Depression shown in class Apr. 29.
• Supplement to text: a writeup on the Federal Reserve System. This is required reading. (Apr 13)
• Here is the Bill of exchange flow diagram that I showed in class.
• Items shown in class Apr 15 and Apr 20:
  • Fed funds target rate
  • Discount rate
  • Fed manipulation of the money stock

Final exam

• The final exam will be held on Tues. May 19 in our regular classroom. Hours: 9:45-noon (noon class); 2:45-5:00 (5PM class). Bring a calculator and pencils; no Scantron form. Cell phones may not be used as calculators.
• A copy of the midterm exam (white version only) with correct answers highlighted is available here.
• An expanded list of terms and concepts was posted on May 9.
• Don't forget the supplementary writeups and powerpoint files. No lists of terms will be provided for those.
• I will answer questions and perhaps do sample calculations in preparation for the final on Wed. May 13. I will probably hold office hours on Mon. May 18.

Lists of terms and concepts for exams

These are the main points from the readings and lectures. It's your job to be clear on their meaning, though I will be happy to take questions in class or by email. There are a few terms that were discussed in lectures but may not be in either book. Click here. (Extended list as of May 9)

Answers to three written questions from midterm exam

are available here.

Provocative lecture series

Each semester the Economics Dept. sponsors a Provocative Lecture Series. You can get 0.5% extra credit just by attending. I will post the schedule of lectures here as I find out about them.

• Tues. May 5, 5:15, Morris Daley Auditorium, lecture on gasoline prices. Preceded at 4:15 by Economics Dept. awards ceremony.
• Thurs. Apr. 16, 5:15, Room 225 in the library: Dr. Kay Yut Chen on Experimental Economics.
• Tues. Feb. 17, 5:15, Room 225 in the library: Prof. Burton Folsom on "New Deal or Raw Deal: How FDR's Economic Legacy Has Damaged America."